D.C.M. FINANCIAL SERVICES LTD. CO. vs M.P. DHINGRA

REVISION petitions from serial Nos. 1 to 139 listed above are directed against order dated 24.6.2003 and REVISION Petitions from Serial Nos. 140 to 172 are directed against order dated 25.7.2003 passed by District Forum-II, Udyog Sadan, Institutional Area, New Delhi in proceedings under Section 27 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act'').

SINCE common questions of fact and law are involved in all the above mentioned petitions the same are being heard together with the consent o the learned Counsel for the petitioner and the learned Counsel for the respondents/respondents in person/A/Representative of the respondents, who were present before this Commission on 29.1.2004 and are being disposed of by this common order. Briefly stated, the relevant facts are, that the respondents named above had filed separate complaints before the District Forum which were decided by the learned District Forum vide common order dated 1.4.2000 in case of first 139 petitions listed above and vide common order dated 16.10.2000 in petitions listed thereafter. Since the petitioner had failed to comply with the said order the respondents had filed proceedings under Section 27 of the Act before the District Forum. In the meanwhile the petitioner had also filed a petition under Section 391 of the Companies Act being Company Petition No. 48/2001 before the Hon''ble Company Court, which was dismissed vide order dated 20.12.2001. Aggrieved by the aforesaid order the petitioner had filed a Revision Petition before the Division Bench of the Hon''ble High Court of Delhi, which was registered as Company Revision Petition No. 7/2002. The Division Bench of Hon''ble High Court of Delhi thereafter vide order dated 17.1.2002 and 22.1.2002 had admitted the above said revision petitions and stayed the operation of the impugned order dated 20.12.2001 passed by the Hon''ble Company Court. Subsequently, the Division Bench of the Hon''ble High Court of Delhi dismissed the said Company Revision Petition No. 7/2002 vide order dated 25.4.2003. The petitioner thereafter had filed a Review Petition on 30.5.2003 which is alleged to be pending before the Hon''ble High Court of Delhi. On the dismissal of the Company Review Petition No. 7/2002 by the Division Bench of the Hon''ble High Court of Delhi vide order dated 25.4.2003 the execution proceedings filed by the respondents before the District Forum were proceeded with and vide order dated 24.6.2003 in Revision Petition from S. Nos. 1 to 139 and vide order dated 25.7.2003 in Revision Petition from S. Nos. 140 to 172 the learned District Forum directed the issuance of non-bailable warrant against the Managing Director and Directors of the petitioner company.

Aggrieved by the impugned orders the petitioner has filed the above Revision Petitions before this Commission.

WE have carefully perused the documents/material on record as well as written submissions filed on behalf of some of the respondents. WE have also heard the arguments advanced on behalf of the parties at length. These Revision Petitions were admitted on two limited questions only : Firstly, as to whether the learned District Forum had exercised jurisdiction not vested in it and had acted with material irregularity in not having a show-cause notice as contemplated under Section 27 of Act, served upon the petitioner, prior to the passing of the impugned order. Secondly, whether the District Forum was competent to pass the impugned order, without the powers of Judicial Magistrate being conferred on it, after the amendment of the Act as a result of Consumer Protection Act (Amendment) Act, 2002. With reference to the first contention of the petitioner it is apparent from the impugned order itself that notice of the application under Section 27 of the Act was duly served on the petitioner and in response thereto the petitioner had appeared before the learned District Forum and had also moved an application under Section 151, Civil Procedure Code for stay of the execution proceedings. Furthermore, various contentions raised by the petitioner were also considered and discussed by the learned District Forum in the impugned order. Even prior to the passing of the impugned order the authorized representative of the petitioner Mr. Prakash Choradia had been appearing in the proceedings before the District Forum under Section 27 of the Act. These observations made in the impugned order have been duly verified by summoning the relevant records of the District Forum for a perusal by this Commission. Thus there appears to be no infirmity in the impugned order in this regard. Even otherwise the impugned order is an interim order and the District Forum has in the exercise of its power under Section 27 of the Act, simply ordered for the issue of bailable warrant against the Managing Director/Directors of the petitioner company for securing the presence of the MD/Directors of the petitioner company and final order on the application under Section 27 of the Act filed by the respondents are yet to be passed. As such the contention of the petitioner that no show-cause notice had been served on the petitioner prior to the passing of the impugned order is baseless and as such not sustainable.

THE second contention of the petitioner is that the District Forum was not empowered to pass the impugned order as the powers of a Judicial Magistrate have not been conferred on the District Forum as envisaged under Section 27(2) of the Amendment Act of 2002. In order to decide the said controversy the relevant provision is being reproduced as under: Section 27. Penalties- (1) xxx xxx xxx xxxx (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the District Forum or the State Commission of the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the First Class for the trial of offences under this Act, and on such conferment of powers the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the First Class for the purpose of the Code of Criminal Procedure, 1973. (3) xxx xxx xxx xxxx

It is significant to note that the above provision begins with the words "notwithstanding anything contained in the Code of Criminal Procedure, 1973", meaning thereby that the provision or Act in which it appears will have an overriding effect over the other provisions as mentioned in the non obstante clause. Hon''ble Mr. Justice G.P. Singh in his book "The Principles of Statutory Interpretation (7th Edition 1997) while traversing on the significance of a non obstante clause states as under : "A clause beginning with ''notwithstanding anything contained in this Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force'', is sometime appended to a section in the beginning, with a view to give the enacting part of the section in case of conflict an overriding effect over the provision or Act mentioned in the non obstante clause. It is equivalent to saying that in spite of the provision or Act mentioned in the non obstante clause the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment. Thus a non obstante clause may be used as a legislative device to modify the ambit of the provision or law mentioned in the non obstante clause or to override it in specified circumstances. The phrase "notwithstanding anything in" is used in contradiction to the phrase ''subject to'', the latter covering the idea of a provision yielding place to another provision or other provisions to which it is made subject. A non obstante clause must also be distinguished from the phrase "without prejudice".

Thus the non obstante clause appearing in Section 27(2) of the Act conveys that this particular provision would have an overriding effect over the relevant provision in the Code of Criminal Procedure, 1973 i.e., Section 11 of the Cr.P.C. which reads as under: (1) In every district (not being a metropolitan area), there shall be established as many Courts of Judicial Magistrate of the First Class and of the Second Class, at such places, as the State Government may, after consultation with the High Courts, by notification, specify : [Provided that the State Government may, after consultation with the High Court, establish, for any local area, one or more Special Courts of Judicial Magistrates of the First Class or of the Second Class to try any particular case or particular class of cases, and where any such Special Court is established, no other Court or Magistrate in the local area shall have jurisdiction to try any case or class of cases for the trial of which such Special Court of Judicial Magistrate has been established].

(2) The Presiding Officers of such Courts shall be appointed by the High Courts.

(3) The High Court may, whenever it appears to it to be expedient or necessary, confer the powers of a Judicial Magistrate of the First Class or of the Second Class on any member of the Judicial Service of the State, functioning as a Judge in a Civil Court.

THUS the above provision read in conjunction with Section 27 of the Amendment Act, 2002 makes it apparent that the powers of a Judicial Magistrate under Section 11 of the Cr.P.C. can be conferred by the High Court on any member of the Judicial Service of the State, meaning thereby that the powers can be conferred on an individual and not on an institution as in the instant case. Under Consumer Protection Act the Legislature has specifically conferred powers of the Judicial Magistrate on the Redressal Agencies established under the Act and in this context the phrase "shall have the powers of a Judicial Magistrate of the First Class for the trial of offences under this Act", clearly convey the legislative intent. THUS the powers of the Judicial Magistrate are inherent in the District Forum/State Commission/National Commission. Even otherwise, it is the fundamental principle of law of interpretation that the interpretation which advances/promotes the intent of the Act should be adopted instead of a approach which would obstruct smooth functioning of the Act. The Consumer Protection Act is a special enactment legislated for the better protection of the consumers. Therefore, keeping in view the said legislative intent, the Hon''ble National Commission has also in an administrative communication dated 27.5.2003 (addressed by the Ex-President Hon''ble Mr. Justice D.P. Wadhwa) to the Presidents of all the District Forums and State Commissions of the country, interpreted the said provision i.e., Section 27(2) of the Act in the following manner : Re : Section 27 : Sub-section (1) creates no difficulty. Sub-section (2) has to be read as under: Power of Judicial Magistrate of the First Class for trial of offences under the Act stand conferred as first portion of this sub-section says "that nothwithstanding anything contained in the Code of Criminal procedure" a Forum shall have the power of Judicial Magistrate of the First Class. These powers thus immediately stand conferred and we have not to go either to High Court or State Government. When powers of a Judicial Magistrate of First Class, as provided in the Code of Criminal Procedure, stand conferred then proceedings are to be conducted under the provisions of this Code, like any other Judicial Magistrate will do. When a Consumer Forum thus has the power of Judicial Magistrate after coming into force of the amended section, it has to proceed with the trial of the offence as provided under the said Code. Sub-section (3) provides that offences may be tried summarily and that would mean as provided by the Code of Criminal Procedure. I hope these interpretations will clarify the situation and there need not be any doubt of ambiguity remaining regarding interpretation of these two sections.

THEREFORE, in view of the above discussion we are convinced that the Redressal Agencies under the Act, have the jurisdiction to entertain and adjudicate upon the applications filed under Section 27 of the Act and as such the learned District Forum in the instant case neither exceeded its jurisdiction nor acted with material irregularity in passing the impugned order. Thus, there being no infirmity in the impugned order, these Revision Petitions are liable to be dismissed and are dismissed accordingly. In the circumstances of the case the parties are left to bear their own costs. R.Ps. dismissed.